Revenue Attribution: The Science of Measuring Marketing Efforts Part 2

Establishing Revenue Attribution Model
Creating a revenue attribution model depends on how a marketer wants to spread revenue across activities targeting customers. There are different models to attribute revenue with pros and cons.

Single Attribution Model
As the name suggests, this model is attributing revenue to a single marketing strategy or campaign, which typically used by marketers just beginning to adopt revenue tracking. They would usually attribute revenue to either first or last touch point before a prospect’s conversion. This results in a flawed emphasis on a single factor being the reason for conversion.

For example, assume a marketer adopts the single attribution model for his/her brand. A prospect lands on the brand’s website through Google search. Then the prospect views the demo on the website and gets interested in consuming the offer, becoming a priority lead for the sales team. A month later, the conversion of the prospect takes place. In this example, a marketer might credit Google AdWords for generating the lead, ignoring other factors like demonstration on the website and interactions created thereafter. Single attribution model puts disproportionate stress on factors influencing a sale that a marketer should be cautious about.

Multilevel Attribution Model
In this model, varying revenue attribution is given to each different marketing activity with multiple touch points. In a simple example, a prospect lands on a brand’s website through Google search and reads about the brand’s booth at a trade show. The prospect then visits the booth and fills out a form to share his/her contact details. A month later, the prospect visits the website again and watches a demo video and eventually converts. In a multilevel attribution level model, each marketing activities would share the revenue.

The exact distribution of revenue would vary from company to company. Some may evenly distribute while some may prefer varying attribution based on individual marketing activities. The most common models adopted by companies are the following:

• Evenly split model: Equal revenue attribution for each touch points (marketing activities).
• Interaction based model: The more a touch point generates interactions with prospects, the more revenue attribution it gets.
• Position based model: Specific touch points are credited with greater attribution compared with rest in an entire set of marketing activities. Usually, the first and last touch points are attributed with most revenue.
• Time varying model: More weight is given to the marketing activity closest to conversion, usually last touch point.
• Title-dependent model: Greater revenue emphasis is given to touch points that attract high-level executives.

What model should a new marketer adopt?

A new marketer should not prematurely finalize on a strategy as the factors affecting lead generation and conversion of every organization may vary widely. A safe and easy approach for a marketer to begin with is adopting evenly split model, giving equal emphasis on each individual activities and then iterating the attribution after few months, after careful analysis of influences and revenue. This reduces the chances of creating a flawed model that results in incorrect assumptions.

One may also apply a combination of these models such as using interaction based model with title-dependent model to gauge where maximum interactions occurred and the position of prospects interacted before converting. You also need to consider the expiration of a touch point from being valid in a system of marketing activities, which may have taken place long time back and that may or may not be valid in measuring revenue attribution. For example, a prospect may have opened an email about an offer nine months back but makes a purchase nine months later; this puts a question whether the email marketing activity should be given credit for influencing the purchase. It may be or may not be depending on the length of sales cycle and model.

You have just read Part 2 of ‘The Science of Measuring Marketing Efforts’. Read the Part 1 here

Originally Published Here: Revenue Attribution: The Science of Measuring Marketing Efforts Part 2

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